National Australia Bank Ltd v Stuart Brothers Pty Ltd

[1995] FCA 688

FEDERAL COURT OF AUSTRALIA   )

NEW SOUTH WALES DISTRICT REGISTRY )    No NG 3180 of 1995
GENERAL DIVISION                 )

BETWEEN:

NATIONAL AUSTRALIA BANK LIMITED
  Applicant

AND:

STUART BROTHERS PTY LIMITED (IN LIQUIDATION)

First Respondent

AND:

MARTIN JOHN GREEN
  Second Respondent

CORAM:    SACKVILLE J.
PLACE:    SYDNEY
DATE:     23 AUGUST 1995

REASONS FOR JUDGMENT

These are proceedings in which the applicant, the National Australia Bank, seeks relief against the first respondent, Stuart Brothers Pty Limited, a company now in liquidation, and Mr M.J. Green, the second respondent, who is the liquidator of the first respondent.

The relief sought by the applicant is in the nature of specific performance of an agreement to provide a charge over the assets of the first respondent.  

The matter today comes before the court by way of a notice of motion filed on behalf of the applicant.  This notice of motion seeks to set aside a subpoena issued on behalf of the first respondent on 8 August 1995.  That subpoena sought production of the following documents as specified in the schedule to the subpoena:

"All correspondence, file notes, memoranda, notes of telephone conversations, security documents and all other documents dated from 1 June 1989 to 31 December 1994 comprising the files held by the National Australia Bank Limited in relation to any overdraft facility, bank guarantee facility, leasing facility and/or payroll facility provided to Stuart Bros Pty Limited (In liquidation) ACN 003 783 499 over the period 1 June 1989 to 31 December 1994."

Mr Bell, who appears on behalf of the applicant, has informed me that a further development has taken place since the filing of the notice of motion.  This is that the first respondent has filed a notice for discovery.  The position of the applicant, as communicated to me by Mr Bell, is that the applicant will provide discovery in accordance with the Rules.  I raised with Mr Watson, who appears on behalf of the respondents, whether any issue still remained concerning the subpoena.  Mr Watson has indicated that, provided that discovery is made by the applicant in accordance with the Rules, the first respondent will not seek to rely upon the subpoena. 

Mr Watson, however, has raised a related issue.  This is whether the first respondent should be required to put on affidavit evidence prior to discovery being provided by the applicant.   Mr Watson's position is that, since the first respondent is in liquidation, it is desirable that the first respondent and its advisers have access to the discovered documents of the applicant before affidavits are finalised.  Those affidavits for the most part can be expected to be provided by officers of the first respondent who no longer have any connection with the company following the appointment of the liquidator.  

Mr Bell opposes this course of action.  He has indicated frankly that one reason for his opposition is that the applicant wishes to have the forensic advantage associated with the preparation of the respondents' affidavits prior to the provision of documents by way of discovery.  Mr Bell has pointed out that the applicant will be filing its affidavits very shortly and that the nature of its case will then be apparent, if not already apparent from the affidavits and the pleadings and particulars already provided.   Mr Bell has also pointed out that the first respondent has access to its own documentation, which I am informed is voluminous. 

While I appreciate the position adopted by Mr Bell, the appropriate course is to formulate directions that are likely to produce the most orderly disposition of this litigation.  If the respondents are required to put on affidavits prior to the provision of discovery, there is, in my view, a real risk of duplication and waste in the preparation of the case for hearing.  The more expeditious and more economical course, in my opinion, is for discovery to be provided and for the respondent to be put on a tight timetable to provide its affidavits after discovery has been provided by the applicant. 

I appreciate that this may involve the loss of some (perhaps marginal) forensic advantage to the applicant.  However, it is appropriate, in my view, to take into account the approach that is likely to produce the most orderly conduct of this litigation.

Accordingly it seems to me that the following is the appropriate course to adopt.

First, the subpoena for production dated 8 August addressed to the National Australia Bank should be set aside.  In this connection Mr Watson has indicated that he does not seek to rely upon the subpoena for production.  I should add that it has always been open to the first respondent to take the course that it has ultimately adopted; that is, to require discovery by the applicant and avoid  the need for the issue of a subpoena directed to the applicant.

Secondly, the applicant should be required to provide discovery by a specified date and that respondents should be required to put on their affidavits within a short time after that specified date.

I direct that the applicant file and serve a verified list of documents on or before 15 September 1995.  I direct that inspection take place on or before 22 September 1995.

I direct that the respondents put on their affidavits on or before 5 October 1995, and I put the matter in for directions on 6 October 1995.

I direct that the directions hearing of 22 September 1995 be vacated in light of the fact that I have put the matter in the list for further directions on 6 October 1995.

The first respondent is to pay the applicant's costs of the applicant's notice of motion filed 15 August 1995.

I certify that this and the preceding 4 pages are a true copy of the Reasons for Judgment of the Honourable Justice Sackville.

Associate:

Dated:1 September, 1995

Heard:23 August, 1995

Place:              Sydney

Decision:23 August, 1995

Appearances:Mr A. Bell, instructed by Dibbs, Crowther & Osborne, Solicitors, appeared for the applicant.

Mr M. Watson, of Harper Watson, solicitors, appeared for the respondents.